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SINGAPORE — Up to $53.7 billion is expected to be drawn from Singapore's past reserves over financial years 2020 and 2021 to respond to the COVID-19 crisis, Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget 2021 statement in Parliament on Tuesday (16 February).
Of the amount, up to $11 billion will be committed to the COVID-19 Resilience Package for this financial year. The remaining $42.7 billion is expected to have been drawn in FY2020, $9.3 billion less than a previously projected sum of $52 billion for the same financial year, said Heng.
"With the effective response of our people and businesses in adapting to the changing situation, we have been able to bring the pandemic largely under control. Hence, our requirements for some areas such as public health turned out to be lower than what was provided for," he added.
Altogether, this would mean a net increase of $1.7 billion from what is expected to be drawn from past reserves to respond to the crisis, Heng said.
"The president has given her in-principle support for the proposed draw of up to $11 billion on past reserves in FY2021, to continue the provision of public healthcare and relief measures in the coming financial year. Once again, I thank the president for her support," he added.
Heng noted that this is the second consecutive financial year where the government will be drawing on Singapore's past reserves, adding that the move is "necessary, given the exceptional circumstances" the country is in.
"We are extremely fortunate to be able to tap on our strategic assets and deploy the resources required to deal decisively with COVID-19 and the considerable uncertainties that lie ahead," he said.
"We should never take our reserves for granted."
An overall budget deficit of $64.9 billion – or 13.9 per cent of gross domestic product (GDP) – is expected for FY2020, the largest since Singapore's independence, added Heng.
Singapore's budget position remains "expansionary" for FY2021 as the government continues to help Singaporeans and businesses tide over the crisis, he said, noting that an overall deficit of $11 billion – or 2.2 per cent of the GDP – is expected.
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